A foreigner doing business in China registering a Chinese company can choose a Wholly Foreign-Owned Enterprise (WFOE). This structure allows foreign parties (individuals or corporate entities) to incorporate a foreign-owned limited liability company, without the involvement of a Chinese investor.
The WFOE is currently the most popular form of incorporation for foreign corporations/companies, in Mainland China, and this structure allows the foreign company complete control of their business operations.
To set up the WFOE, in China, you must arrange an agreed level of foreign capital for investment and register with the authorities. Depending on the type of business, you may also need a Business license to conduct your business legally, with approval of the Chinese government.
Advantage of the WFOE, include:
- Can uphold a company's global strategy free from interference by Chinese partners (as may occur in the case of joint ventures)
- New, independent legal personality
- Complete management control within the limitations of the laws of the PRC
- Possibility to receive and remit RMB to the investor company overseas
- Enhanced protection of trademarks, patents and other intellectual property, in accordance with international law
- Shareholder liability is limited to original investment
- Easier to terminate than an Equity Joint Venture
- Simpler establishment than a Joint Venture
Disadvantages of the WFOE, include:
- Inability to engage in certain restricted business activities
- Limited access to government support and a potentially steep learning curve upon entering the mainland Chinese market
- Requires the injection of foreign funds to make-up the registered capital, which is unnecessary with a Representative Office
- Regional differences in regulations and practical differences in the application of Chinese legislation can also apply
Other Types of Business structures, in China are:
Joint Venture (JV)
Representative Office
State Owned Enterprise (SOE)
Private Enterprise
Individually Owned (Sole Trader)
VisaConnect: Migration Agents and Lawyers
You speak English and no Mandarin? Meeting and networking with Expats (from Australia, UK, US and other countries) is a great way to get free tips about China business, culture, introductions, make new friends, and even find a new business partner!
In China, there a multitude of different organizations and events that are incredibly beneficial for foreigners. Some organizations offer free events, others are on a pay as you go basis, and others offer membership and cheaper entrance fees and benefits to members.
As an Expat, now living in China, what organizations should I join?
1. Chamber of Commerce - A Chamber of Commerce is a commercial based organization that is affiliated to a particular country and promotes closer relations between China and the foreign country through guest speakers, events, socializing functions etc.
For example:
Australian Chamber of Commerce, Shanghai - offer regular, almost daily events, including talks, seminars, drinks and socializing, training, New China policies talk, Christmas function.
Benefits of joining AustCham are:
"AustCham Shanghai membership provides access to support, education, advocacy and business services, as well as countless events and networking opportunities.
The key point of difference for AustCham Shanghai is that business membership gives you access to a dedicated individual in our team at the Secretariat, a Relationship Manager, who will work with you to further your business interests.
AustCham Shanghai's Membership Team provides introductions, business referrals, and advice on a range of topics. Daily our team gives advice and fields questions across issues including market entry, business set up structure, suitable partner and provider identification, marketing and branding opportunities, to general advice that helps organizations understand the shifting business landscape that is mainland China."
Note that you don't have to be an Australian citizen to join the Australian Chamber of Commerce nor do you have to be an American citizen to join the American chamber of Commerce - most of the events appeal to Expats and local Chinese for that matter, and are in the English language, non specific events and informative events that are very inclusive and open to people of all races, backgrounds and nationalities.
2. Meetup - this is a wonderful online avenue to tap into an enormous talent of rich and diverse Expat professionals, in a social and relaxed environment, just through searching for a group of your choice, in your city in China. Many of these events include: Walking groups, Singles events, Dining, Expats, Cooking, Basic Chinese communication, French speakers event, Museum and Arts groups, in Shanghai, Shenzhen, Beijing and other locations. At these events, you can exchange business cards and build your network fast, in a non-pressured atmosphere.
3. Expat Groups - hold regular networking and informal drinks events for Expats living in China. For example: Internations:
"With InterNations you can interact with a knowledgeable and experienced community of expats that have lived and worked in China. Don't feel you need to learn everything on your own, call on the InterNations community to help you get to grips with your new life abroad with a click of a button. Moving to China is a big step, and you may have a lot of questions you want answered such as, “how much does it cost to rent a two-bedroom apartment in Beijing?”
4. Volunteer Organizations - for example, Rotary, which is focused on business professionals attending lunch/dinner events with a guest speaker, networking and supporting other members and helping with Student exchange programs globally and other community and volunteer programs:
There’s something that all Rotary club members have in common: We take action. As community volunteers, we reach out to neighbors in need. We build, support, and organize. We save lives. We work locally and globally.
"Around the world and around the corner, the 1.2 million men and women of Rotary
- Get involved in their communities
- Connect with other professionals
- Share their time and experience with young people
- Support global causes, such as eradicating polio
- Use their skills to help others"
5. Business Network International China (BNI) - joining a particular Chapter or branch of BNI enables you to present information about your company services to other professionals, usually over a breakfast. The group comprises about 20 people of all different occupations and it is not permitted for there to be more than 1 member of the same occupation, so as to avoid competition and enhance your chances of getting exclusive referrals:
"Belonging to BNI is like having dozens of sales people working for you...
...because all of them carry several copies of your business cards around with them. When they meet someone who could use your products or services, they take out your card and recommend you. It's as simple as that! If I give you business you'll give me business and we'll both benefit as a result."
"Last year alone, members of BNI passed 6.6 million referrals...
...which generated over $8.6 billion dollars' (U.S.) worth of business for its members! BNI is a business and professional networking organization that allows only one person per professional classification or specialty to join a chapter."
6. China Business Network - method of promoting your business to local Chinese citizens and getting business consulting advice, and localization help for a fee:
"China Business Network (CBN) is a consortium of entities focusing on outwards investment, outbound travel from China as well as facilitating trade both import and export fitting our slogan " Bring the World to China - Taking Chinese to the World" by providing business consultancy and facilitating services for large numbers of Chinese and foreign authorities, businesses as well as other organizations."
7. Female Networking Groups - which have a wide array of events, talks, walks, and mentor programs. For example, Viva Beijing Professional Women Network:
"At Viva we enable professional women in Beijing to increase their impact and enjoyment of working life by providing a network where they can
- share knowledge and enhance their professional skills
- make meaningful business connections and friendships
- meet like-minded people, be inspired and have fun!"
8. Linked In - this is an internet based opportunity for you to self-promote yourself through uploading your Photo and CV/Resume, qualifications education and work experience and then adding professionals to your network for business co-operation and to be informed about their events, seminars etc.
9. Chinese Online Networking Groups - useful for building a network of Chinese followers and promoting your products/services, in Mandarin. These networks enable both businesses and individuals to create an online profile and join groups of interest. They can be useful for self-promotion, recruitment and making new contacts in your field. For example, Wechat, QQ, Tianji, Dajie, Binzhi or Ushi.
10. Expat Magazines - reading regular issues of Expat magazines is a great way to find out what's going on, in your city, keep updated about news, and view advertisements in English from other Expats looking for jobs or advertising jobs, and classifieds. For example, in Beijing, there are the following excellent magazines:
The Beijinger
Time Out Beijing
That's Magazine Beijing
City Weekend Beijing
11. Mandarin Study Course - studying Mandarin in China gives you numerous advantages: learning Mandarin to be able to have basic or advanced conversation with Chinese clients and not needing a translator ever again, opportunities to network and make friends for fellow expat classmates, learn about Chinese history, culture and participate in Group Tours of a Chinese city.
VisaConnect: Migration Agents and Lawyers
To do business in China, as a foreigner, you will need a business visa and preferably an Interpreter and confirmed Exhibition or Expo booking.
An Interpreter/Translator can save a non-Chinese speaker alot of time and enable you to get from A to B quickly and efficiently. Especially, if you are traveling to China for the first time or you have been there many time but speak no Chinese and are not familiar with various cities. An Interpreter can arrange to meet you on arrival at the airport at Shenzhen, Shanghai or what ever city you arrive at. They will guide you to your planned meetings, expo event, help with buying meals, getting train tickets and booking a taxi.
In many instances, you will find that there are a substantial number of people in the service industry who do not speak any English. Of course, you can try and cut corners and save costs, by being prepared, and printing out the name of a company and their address, in Chinese to pass to the taxi driver, but that doesn't always work, because the taxi driver will probably have questions about which entrance to an Expo and they may not be familiar with the address.
You can attend an Exhibition in China, such as the massive Canton fair in Guangzhou, Guangdong province, as a Visitor/Buyer (usually free) or as an Exhibitor (you pay the costs for a stand/booth for 2 - 3 days plus you need to supply roll-up banners, advertising materials and Chinese Interpreters).
Up to the 119th session, the accumulated export volume for the Canton Fair has amounted to about USD 1.2 trillion and the total number of overseas buyers has reached 7.64 million. The exhibition area of one session totals 1.18 million m2 and the number of exhibitors from home and abroad stands at more than 24,000. In each session, about 200,000 buyers attend the Fair from more than 210 countries and regions all over the world.
The Canton Fair (China Import and Export Fair - established in 1957) is scheduled for twice a year - in April/May and in October annually, located at No. 380, Yuejiang Zhong Road, Haizhu District, Guangzhou. It's so huge and gigantic that not all exhibitors can exhibit at the same time. For example, the Canton Fair is normally held over 3 phases (different dates during a month, with a phase being 1 week):
Phase 1
Electronics & Household Electrical Appliances
Lighting Equipment
Vehicles & Spare Parts
Machinery
Hardware & Tools
Energy + Resources
Chemical Products
Building Materials
International Pavilion
Phase 2
Consumer Goods
Gifts
Home Decorations
Phase 3
Office Supplies, Cases & Bags, and Recreation Products
Medical Devices and Health Products
Food
Shoes
Textiles & Garments
International Pavilion
Note that you can actually find a wide selection of Translators/Interpreters spontaneously standing on the street near the Canton Fair site, just up from the metro station to the Fair (Pazhou Station - Area B & Area C of Canton Fair Complex). They are mainly students looking to earn some extra income and their English is pretty good. They will charge about 250 or 300 RMB for a full day's assistance. Once you are inside the trade Fair, you can travel between Area, via the free courtesy Shuttle Bus.
VisaConnect: Migration Agents and Lawyers
Sanya is situated on the southern end of Hainan island, and is regarded as the tourist centre of Hainan island. Popular tourist destinations are: Yalong Bay, which is known for luxurious hotels, while Wuzhizhou Island and and its coral reefs are destinations for scuba diving, surfing and other water sports. In 2010, the population of Sanya was estimated to be 650,000 people.
Haikou is the capital city of Hainan province. it is situated in the north of Hainan island, and is a port city. In 2010, the population of Haikou was estimated to be more than 2 million people. Haikou is divided into 4 Districts: Longhua, Xiuying, Qiongshan and Meilan.
The following document are required for the visa on arrival, at the port of entry:
1. Passport
2. Passport photographs x2
3. Processing fee (about $20 USD)
4. Second form of ID (eg. photo driving licence), may be required
Citizens of the following countries are exempt from applying for a Hainan Visa on Arrival and they also do not need a prior visa, as issued by the Chinese Consulate, provided that they are traveling to Hainan on a TOURIST GROUP (more than 5 people), organized by an international Travel agency, registered in Hainan Province, and approved by China National Tourism Administration, and also their stay cannot exceed 15 days:
Australia
Austria
Canada
Denmark
France
Finland
Germany
Indonesia
Italy
Japan
Kazakhstan
Malaysia
Netherlands
New Zealand
Norway
Philippines
Russia
Singapore
South Korea
Spain
Sweden
Switzerland
Thailand
Ukraine
United Kingdom
United States
Can the Hainan Visa on Arrival be extended?
Yes it can.
Unlike, the Shenzhen Visa on arrival or the Zhuhai visa on arrival or the Shanghai 144 hour visa exemption - it is possible to apply for a visa extension for the Hainan Visa on arrival.
The 15 day visa on arrival can be extended for a further 15 days, up to a maximum of 30 days, at the visa section of the Public Security Bureau (PSB) in either Haikou or Sanya.
Is it possible to also apply for a Visa on Arrival for Business purposes, in Hainan?
Yes, it is possible to get a visa on arrival at Haikou and Sanya, if you visit Hainan for business investigations, trade, investment negotiation, technical exchange, travel or enter Hainan due to an emergency, provided that your stay does not exceed 15 days.
VisaConnect: Migration Agents and Lawyers
The Chinese government have implemented a 72 hours Visa Free Transit policy, which means that eligible passport holders can visit designated cities in China for up to 3 days, without a visa and without needing to apply in advance for a visa at the Chinese Consulate, in their country of residence.
Note that the following Chinese cities are part of the Visa Free transit policy:
- Beijing - (cannot leave the administrative area of the transit city)
- Shanghai
- Guangzhou - (can stay in the whole province)
- Chengdu - (can stay in the whole province)
- Chongqing - (cannot leave the administrative area of the transit city)
- Harbin - (cannot leave the administrative area of the transit city)
- Shenyang - (can just stay in this city)
- Dalian - (can just stay in this city)
- Xian
- Guilin - (cannot leave the administrative area of the transit city)
- Kunming - (cannot leave the administrative area of the transit city
- Wuhan - (cannot leave the administrative area of the transit city)
- Xiamen - (cannot leave the administrative area of the transit city)
- Tianjin - (cannot leave the administrative area of the transit city)
- Nanjing
- Qingdao - (can stay in the whole province)
- Changsha - (can stay in the whole province)
- Hangzhou
Citizens of the following countries are eligible to apply for the 72 hour Visa Free Transit:
Schengen Agreement Countries:
Austria, Belgium, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden, Switzerland.
Other European Countries:
Russia, the United Kingdom, Ireland, Cyprus, Bulgaria, Romania, Ukraine, Serbia, Croatia, Bosnia-Herzegovina, Montenegro, Macedonia (FYROM), Albania.
American Countries:
United States, Canada, Brazil, Mexico, Argentina, Chile.
Oceania Countries:
Australia, New Zealand.
Asian Countries:
Korea, Japan, Singapore, Brunei, United Arab Emirates, Qatar.
When does the 72 hour period start?
The 72 hours starts from 00:00 the day following the entry date in almost all the airports.
What documents are required for the 72 Hour Visa Free Transit:
- Passport
- Visa for a 3rd country
- Arrival/Departure Card (including name, nationality, passport no., visa no. & issuance place, flight no., purpose of visit, date of birth, gender)
- Onward travel ticket
VisaConnect: Migration Agents and Lawyers
The Zhuhai Visa on Arrival (Port visa or Landing visa) is similar to the Shenzhen Visa on Arrival and is the same cost: 168 RMB for applicants of most countries, but UK nationals have to pay 469 RMB. You apply for the visa at the Gongbei Port, in the Gongbei immigration building.
The visa is actually named: The Zhuhai Special Economic Zone (SEZ) Visa, and is available for many citizens (Australian, NZ etc).
Special Economic Zones (SEZ, 经济特区) set up to encourage development and foreign investment with tax concessions and other government measures. These began in 1980 as a provincial government initiative. SEZs tend to be prosperous, have large expatriate communities, and have more Western restaurants and facilities. They are:
Shenzhen, Zhuhai and Shantou (Guangdong)
Xiamen in Fujian
Hainan (entire island province)
Shanghai (Pudong district)
The city of Zhuhai is comprised of: Gongbei, Jida and Xiangzhou. The main Districts of Zhuhai are:
Jinding (金鼎; Jīndǐng)
Tangjiawan (唐家湾; Tángjiāwān)
Xiangzhou (香洲; Xiāngzhōu)
Jida (吉大; Jídà)
Gongbei (拱北; Gǒngběi)
The following countries have a Visa Exemption (They do not need to apply for a visa or visa on arrival):
Brunei (stay up to 15 days)
Japan (stay up to 15 days)
San Marino (stay up to 30 days)
Seychelles (stay up to 30 days)
Singapore (stay up to 15 days)
Below is a list of countries eligible to apply for the Zhuhai Visa on Arrival, and the current visa fees in RMB:
Australia, New Zealand, Canada, Ireland, Spain, and others pay RMB 168.
Angola: RMB 681
Armenia: RMB 420
Bolivia: RMB 414
Brazil: RMB 369
Bulgaria: RMB 504
Cameroon: RMB 480
Chile: RMB 429
Congo: RMB 747
Cote D’Ivoire: RMB 737
Ecuador: RMB 414
Ethiopia: RMB 487
Gabon: RMB 512
Kazakhstan: RMB 429
Mexico: RMB 371
Moldova: RMB 455
Montenegro: RMB 160
Panama: RMB 579
Poland: RMB 475
Romania: RMB 512
Russia: RMB 393
Ukraine: RMB 409
United Kingdom: RMB 304
Uzbekistan: RMB 512
Venezuela: RMB 585
Citizens of the following countries are currently not eligible to apply for the Visa On Arrival:
France
United States
On arrival, you just need to present your Passport (with more than 6 months validity remaining), completed Visa Application Card and pay the visa fee.
VisaConnect: Migration Agents and Lawyers
The Serviço de Migração is the government agency responsible for processing visa applications in Macao, whilst the Public Security Police Force is responsible for enforcing immigration laws in Macao.
Macau is an autonomous region on the South coast of China, about 1 hour by Ferry boat across the Pearl river Delta from Sheung Wan port in Hong Kong. "The Historic Centre of Macao" is inscribed on the World Heritage List in 2005, and there are more than 20 ancient monuments and urban squares. In addition, Macau is famous for its massive casinos, shopping malls on the Cotai Strip, which joins the islands of Taipa and Coloane and has acquired a nickname, "Las Vegas of Asia." In 2016, the population of Macau was estimated to be 650,000 people.
All visitors must hold a passport valid for 1 month.
Visa Exemptions:
1 Year stay:
- Holders of a Hong Kong Permanent Identity Card or a Re-entry Permit, regardless of nationality
6 Months stay:
90 days stay:
- European Union European Union citizens
- Albania
- Andorra
- Bosnia and Herzegovina
- Brazil
- Cape Verde
- Dominica
- Egypt
- Grenada
- Iceland
- Israel
- Japan
- Lebanon
- Liechtenstein
- Macedonia
- Mali
- Mauritius
- Mexico
- Moldova
- Mongolia
- Montenegro
- Morocco
- New Zealand
- Norway
- Serbia
- South Korea
- Switzerland
- Tanzania
- Uruguay
30 days stay:
- Australia
- Belarus
- Canada
- Chile
- India
- Indonesia
- Kiribati
- Malaysia
- Monaco
- Namibia
- Philippines
- Russia
- Samoa
- San Marino
- Seychelles
- Singapore
- South Africa
- Taiwan
- Thailand
- Turkey
- United States
14 days:
Nationals of the following countries must apply for a visa in advance though the Chinese Diplomatic Mission:
- Bangladesh
- Nepal
- Nigeria
- Pakistan
- Sri Lanka
- Vietnam
VisaConnect: Migration Agents and Lawyers
